Overcoming a Long-Term Lease & Lending Hurdles

About the Client

Established in 1883, the Fencers Club is a 501(c)(3) nonprofit organization dedicated to the pursuit of excellence through the sport of fencing. Community service is a significant part of their mission, which extends far beyond fencing.

Project Details

  • Nonprofit
  • Office Condo Financing
  • 14,000 sf
  • $14.7M
  • $9.0M Bond Financing
  • $5.2M Capital Campaign Funds

Overcoming Credit Challenges

Despite having raised over $5M from individual donors, the Fencers Club fell significantly short for the $10.7M needed to acquire a commercial condominium at 20 West 33rd Street. In addition, the 14,000-square-foot space required another $4M in renovations.

Prior attempts had failed to secure tax-exempt bond financing. The nonprofit and its legal and financial advisory team incorrectly concluded that the only option was a bank loan.

Managing Cash Flow

A number of logistical issues compounded the nonprofit’s borrowing challenges. The Fencers Club had planned to move into the new space, currently occupied by a for-profit company, as part of a long-term lease agreement, but not until 2020. Tight cash flow combined with the difficulty of managing the timing of the transition compounded the challenges associated with funding the project.

Tax-exempt Financing

Ultimately, the Fencers Club qualified for tax-exempt financing, placed with a commercial bank at attractive interest rates. Our success is owed to multiple tactics, including the strategic marketing of the credit and our credibility with lenders within an extensive bank and investor network.

Financing Teamwork

By far, one of our greatest advantages was the confidence placed by the Fencers Club and its Board in our ability to get the project financed. The persistence, patience, and proactive approach demonstrated by our legal and real estate broker/consultant partners made the difference for our client.